5 Stocks Poised for Breakouts

These stocks look poised to break out and trade higher from current levels.

WINDERMERE, Fla. ( Stockpickr) -- Trading stocks that trigger major breakouts can lead to massive profits. Once a stock trends to a new high, or takes out a prior overhead resistance point, then it's free to find new buyers and momentum players that can ultimately push the stock significantly higher.

A recent example of a successful breakout trade is biotech stock Sarepta Therapeutics ( SRPT), which I flagged in Aug. 17's " 5 Stocks Poised for Big Breakouts as it was starting to make some sharp spikes higher off of $9 a share with strong upside volume. I mentioned how this bullish price action was pushing SRPT within range of triggering a major breakout trade if the stock could clear some overhead resistance at $10.78 a share.

Guess what happened? Just a week later SRPT exploded above $10.78 with heavy volume and went on to hit a high in September at $16.44 a share. That's a huge gain in a very short timeframe, but SRPT wasn't done. This stock defined the laws of gravity and exploded over 170% higher on Wednesday to hit an intraday high of $45 a share after the company said eteplirsen, its flagship product, met its primary endpoint in a phase IIb study in its treatment of Duchenne Muscular Dystrophy patients.

Breakout candidates are something that I tweet about on a daily basis. I frequently tweet out high-probability setups, breakout plays and stocks that are acting technically bullish. These are the stocks that often go on to make monster moves to the upside. What's great about breakout trading is that you focus on trend, price and volume. You don't have to concern yourself with anything else. The charts do all the talking.

Trading breakouts is not a new game on Wall Street. This strategy has been mastered by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas. These pros know that once a stock starts to break out above past resistance levels, and hold above those breakout prices, then it can easily trend significantly higher.

Birinyi Associates president Laszlo Biriny opined that maybe the economy will catch up and the stock market may not have strong gains going forwardThe stock markets in the United States fluctuated on ...